Roberto Building Material Pte Ltd and Others v Oversea-Chinese Banking Corp Ltd and Another

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 01 April 2003
• Neutral Citation: [2003] SGCA 18
• Court: Court of Appeal (Singapore)
• Published date: 24 May 2004
• Year: 2003
• Plaintiff Counsel: Joseph Tan Wee Kong, Foo Jien Huei (Kenneth Tan Partnership)
• Defendant Counsel: Lee Eng Beng, Chio Yuen-Lyn (Rajah & Tann),Loong Tse Chuan (Allen & Gledhill)
• Subject Matter: Civil Procedure,Jurisdiction,Inherent,Stay of appeal pending payment of taxed costs of action below,Rules of Court O 92 r 4 (Cap 322, Rule 5, 1997 Rev Ed).,Appeals,Stay of appeal,Whether a single Judge can order stay of appeal pending payment of taxed costs of action below,Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) s 36(1).
• Citation: [2003] SGCA 18

Delivered by Choo Han Teck J

1 There were two applications taken out by the first respondent in Notice of Motion 18 of 2003. The first was for an order dismissing the appeal unless the appellants pay forthwith costs of the trial taxed at $280,000 as well as a further sum of $7,000 being costs thrown away in favour of the first respondent. The second application was for an order for further security of $80,000 in respect of costs for the appeal.

2 The first respondent was a defendant in the trial below. The first appellant is a company in which the second, third and fourth appellants are directors owning in total a total of 99.8% of the shares in the company. The first respondent is a bank which, in 1995, granted banking facilities to the first appellant. The other appellants executed deeds of guarantee in respect of those facilities. The first appellant defaulted in 1997 but managed to reduce the debt in 1998 but remained largely exposed.

3 By March 2000 the first appellant’s financial position deteriorated to the extent that the first respondent felt compelled to demand payment of the outstanding debt of $32,921,485.06 from the four appellants. On 22 April 2000 the first respondent exercised its contractual rights and appointed a Receiver and Manager (the second respondent) to the first appellant.

4 The first appellant subsequently commenced proceedings by way of Originating Summons No 1889 of 2000 against the first and second respondents alleging among other matters, bad faith on the part of the first respondent, as well as recklessness in appointing the second respondent as Receiver and Manager. Essentially, the first appellant alleged that its financial ruin was caused by the first and second respondents. The first appellant claimed that not only were they not liable for the $32,921,485.06 debt but also claimed for damages in the region of $25,000,000 to $30,000,000 on account of loss suffered by them arising from the fault of the respondents.

5 The second, third and fourth appellants also executed a deed of indemnity in favour of the first appellant to indemnify it against any costs that might be awarded against the company. The originating summons was converted to a writ action and tried before Justice Lai Kew Chai. The appellants lost. Costs were awarded to the first respondent and taxed at $280,000. In addition to this sum, a sum of $7,000 being costs thrown away to the first respondent in respect of amendments to the pleadings. The four appellants filed an appeal against the decision of Justice Lai but had till date not paid the costs due to the first respondent. They were also ordered to pay the second respondent’s costs although the latter had not yet taxed the costs awarded.

6 Mr Joseph Tan appearing on behalf of all the appellants initially objected to Mr Lee Eng Beng’s application on behalf of the first respondent to amend the Notice of Motion so that "First Appellant" may read as "the Appellants" or "First, Second, Third and Fourth Appellants". He submitted that he had not prepared any arguments on behalf of the second, third and fourth appellants because they were not named in the motion.

7 It appears to me that the objection was a specious one in the circumstances will show. The exchange of correspondence between the solicitors indicated that all the appellants (who were jointly represented by Mr Tan) were aware of the nature and grounds of this application. The only dispute or issue was whether the first respondent ought to have made a formal application by way of a summons-in-chambers to amend the Notice of Motion. Mr Tan referred me to SMS Pte Ltd v Power Energy Pte Ltd [1996] 1 SLR 767 in which the court ruled that an application to strike out a defence must be made by way of a summons-in-chambers and not orally on the day of trial. The basis was that the defendant did not comply with certain discovery orders.

8 I do not think that the decision in the SMS case can be criticised because it did not appear that there were any sound reasons why a formal...